Why Facebook Opened Its First Pop-up Stores

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Facebook has made several attempts to move into eCommerce in the past with Facebook stores (where users could purchase items from brands), Facebook gifts (where users could purchase gifts for friends through third party sites), Facebook Marketplace (which is similar to Craigslist) and by adding buy buttons to Facebook business pages. All of these attempts have had limited success at positioning the social media company as a force in eCommerce.  Recently Facebook tried another experiment with eCommerce by opening its first pop-up stores.  Nine pop-up stores showcasing products from over 100 of Facebook’s “most-loved” small businesses and digitally native brands are now showcased in Macy’s.

The Market @ Macy’s, where the pop-ups are located, opened earlier this year and is a space within Macy’s where it rotates various brands in and out.  The brands within Facebook’s pop-ups are from a variety of different categories including apparel, lifestyle, food and beauty. Some of the brands include Bespoke Post, Two Blind Brothers and Mented Cosmetics.   There is no revenue sharing model between Facebook and the brands featured in its pop-ups. The brands keep all of the revenue that they generate while Facebook pays Macy’s a fee to use the space.  The pop-ups will be in Macy’s until February 2, 2019. 

In addition to the pop-ups Facebook’s other IRL (in real life) efforts include taking out 600 ads in 115 locations within New York’s grand central station to promote the pop-ups.  It is telling that Facebook whose entire business is based on the internet is supporting the placement of brands in retail stores.  It is taking a page out of the playbook of other digital natives such as Amazon that started out online but now have stores.  For brands that start out online acquiring customers over time primarily through digital marketing can be cost prohibitive. As Jonah Berger stated in his best-selling marketing book Contagious, only 7% of word of mouth happens on-line. Many digital natives including Amazon, Warby Parker, Indochino, Everlane and Casper have opened up stores since it is a great way to generate traffic and shoppers still like to touch and feel products before buying them.

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Sources

https://www.fool.com/investing/2018/11/11/why-is-facebook-launching-pop-up-shops-at-macys.aspx

https://techcrunch.com/2018/11/05/facebook-pop-up-store/

Tricia McKinnon